THE Lib-Con Government has received a pre-election boost with the International Monetary Fund saying the UK economy will become the world's fastest growing economy this year.
The Washington-based global watchdog upped its 2014 prediction for Britain from 2.4% growth to 2.9%, putting it ahead of America on 2.8%, Canada 2.3% and Germany on 1.7%.
The IMF's new forecast for this year is higher than the 2.7% predicted by the Office for Budget Responsibility but it is lower than the Bank of England's prediction of 3.4% growth.
The report said UK growth had "rebounded more strongly than anticipated" although the recovery remained unbalanced with business investments and exports remaining disappointing. It also sounded a warning over the risk posed by surging house prices and the threat of deflation in the eurozone.
It said the Bank of England's monetary policy, which has seen interest rates held at 0.5% for four years and £375bn of quantitative easing pumped into the economy, should remain "accommodative".
George Osborne, currently on a trade mission to Brazil, tweeted: "Good news from IMF: UK forecast to grow faster than any other western country + has biggest upgrade."
But he added: "Job is not done. We need to do more to get our exports and investment going."
A Treasury spokesman said the upgraded forecast was "further evidence that the Government's long-term economic plan is working".
But Shadow Chancellor Ed Balls, while welcoming the IMF upgrade, stressed that millions of Britons were still worse off than when the Coalition came to power by an average of £1600 a year and had yet to feel the benefits of economic upturn.
"The IMF is right to warn about an unbalanced recovery and it is concerning that growth is expected to slow down next year," he noted."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article